YAHOO [BRIEFING.COM]: Declining issues outnumbered advancers by
4-to-1 in the S&P 500 as profit-takers pressured stocks for the entire
session. Financials felt the brunt of the selling effort, but strength in
large-cap tech helped the Nasdaq
outperform its counterparts.
There weren't any major earnings announcements or economic reports
to act as positive catalysts for the stock market Monday. The dearth of data
seemed to encourage a round of profit taking by participants who had watched
stocks climb nearly 6% last week.
As has been the recent trend, financials were the best performers
last week, which made them an easy target for sellers looking to lock in gains.
In turn, the financial sector shed 6.8%, cutting into last week's 23% gain.
Diversified banks slipped 6.7% and regional banks dropped 8.5%
after several companies announced plans to raise capital.
In a common equity offering, Wells Fargo (WFC 26.53, -1.65) announced it raised
$8.6 billion, which is more than it originally set out to raise.
The bank was told by regulators last week that it needs to come up with $13.7
billion in capital. Wells
Meanwhile, Bank of America
(BAC 12.94, -1.23) was told last week that it needs more Tier 1 capital, but
the company didn't offer any immediate plans to satisfy the measure during a
conference call today.
Despite the weakness in bank stocks, multiline insurers (-7.5%) and
life and health insurers (-10.5%) saw some of the steepest losses. Their
weakness comes as debate over health care reform is set to intensify during
coming days. The threat of reform also weighed on managed health care
providers, which finished 4.7% lower.
Sellers intensified their efforts against the financial sector into
the close, which exacerbated weakness in the broader market and caused the
S&P 500 to finish near session lows.
The Nasdaq was
able to limit its losses, thanks to the relative strength of large-cap tech
stocks. Large-cap tech rebounded from hefty losses in the early going as
participants considered the early gap down to be an opportunity to rotate into
the sector, which didn't see the trend chasing that financials saw the week
before.
Despite the strength of large-cap tech, the broader tech sector
finished just above the unchanged mark.
Telecom was the only sector to log a respectable gain, thanks to
leadership from AT&T
(T 25.36, +0.11), which will pay Verizon
(VZ 29.82, -0.03) $2.35 billion for certain wireless assets. Meanwhile,
AT&T has also agreed to sell certain wireless assets to Verizon for $240
million.
With equities under pressure, Treasuries were able to snap back
after contending with weakness last week. The benchmark 10-year Note regained a
full point, which lowered its yield to 3.17%.
There are only a few earnings announcements scheduled for Tuesday
morning, none of which are expected to act as catalysts for the broader market.
In terms of tomorrow's economic data, the March trade balance (8:30 a.m.
ET) is expected to show continued contraction as countries contend with ongoing
economic headwinds. The Treasury's budget statement for April is expected to be
released later (2:00 p.m. ET). DJ30 -155.88 NASDAQ -7.76 NQ100 +0.1% R2K
-1.9% SP400 -2.3% SP500 -19.99 NASDAQ Adv/Vol/Dec
1087/2.49 bln/1637 NYSE Adv/Vol/Dec 862/1.49 bln/2179